Small and Medium Enterprise Development Support Project

Better due diligence of financial intermediaries is required. ADB did not adequately assess the risk rating process of SBC or do enough work to understand its processes and procedures. A better understanding of SBC would have enabled ADB to assume more decision-making responsibility on the implementation of the facility. In addition, ADB should have undertaken due diligence of other potential PFIs at appraisal. Leaving the decision to SBC about which SMEs could participate would not have required extensive ADB staff involvement after PFI selection and might have encouraged other banks to participate.